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TEN PROJECTS OBSERVED Final Report

“Ex post evaluation of investment projects co-financed by the European Regional Development Fund (ERDF) and/or Cohesion Fund (CF) in the period 1994-1999”. TEN PROJECTS OBSERVED Final Report. Evaluation Network Meeting Brussels, 23 November 2012. THE TEN PROJECTS. IRELAND : M1 Motorway

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TEN PROJECTS OBSERVED Final Report

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  1. “Ex post evaluation of investment projects co-financed by the European Regional Development Fund (ERDF) and/or Cohesion Fund (CF)in the period 1994-1999” TEN PROJECTS OBSERVED Final Report Evaluation Network Meeting Brussels, 23 November 2012

  2. THE TEN PROJECTS • IRELAND: • M1 Motorway • Dublin wastewater treatment • SPAIN: • Sogama solid waste treatment in Galicia; • Wastewater treatment in Ría de Vigo • Madrid Metro Line 8 • Mediterranean Corridor • ITALY: • Port of Gioia Tauro • Water supply in Palermo • PORTUGAL: • Valorsul solid waste treatment in Lisbon • GREECE: • Egnatia Motorway

  3. INVESTMENT COSTS AND EC CO-FINANCING *Note: prices are expressed in constant terms (Euro 2011)

  4. CONCEPTUAL FRAMEWORK WHAT: “What kind of long term contributions can be identified for different types of investment in the field of environment and transport infrastructure?“ • Economic development • Direct welfare and economic growth • Endogenous dynamics • Quality of life • Social cohesion • Environmental effects • Territorial cohesion • Institutional learning • Social happiness and wellbeing WHEN: “What is the minimum and average time needed for a given long term contribution to materialise and stabilise? What are these time spans for different types of investment in the field of environment and transport infrastructure? “ • Effects stabilised • In the short run • In the long run • Effects not yet stabilised HOW: “How are these long term contributions generated for different types of investment in the field of environment and transport infrastructure, i.e., what is the causal chain between certain short term socio-economic returns and long term returns from investment?” • Appropriateness to the context • Project design • Forecasting capacity • Project governance • Managerial response

  5. DEVELOPMENT EFFECTS AT A GLANCE

  6. LESSONS LEARNT ON THE EFFECTS (1) Direct welfare and economicgrowth

  7. LESSONS LEARNT ON THE EFFECTS (2) Endogenous dynamics: Less important than direct economic growth effects More likely to be secured by transport projects Social cohesion: Side effects in 8 out of 10 projects They can reach significant magnitude if appropriately exploited Environmental sustainability: As expected, environmental projects produce positive environmental effects Their full achievement is hampered by various operational difficulties

  8. LESSONS LEARNT ON THE EFFECTS (3) Territorial cohesion: Side effects for environmental projects Transport projects have no far-reaching and automatic effects Institutional quality: Low or medium effects for all the projects observed, particularly for environment projects Possiblelack of critical mass: major projects are big but few Social happiness: They can be influenced by proactive measures Social (dis)satisfaction can be ‘captured’ by organised vested interests

  9. THE TEMPORAL DYNAMICS OF PROJECT EFFECTS The majority of effects appears to have already stabilised, either in the short or long run In some cases effects are not stabilised, but planned investments are expected to improve performance in the future

  10. PERFORMANCE DRIVERS AT A GLANCE

  11. LESSONS LEARNT ON THE PERFORMANCE DRIVERS (1) Appropriateness to the context: All projects provided adapted solutions to population’s needs (except the Port of Gioia Tauro) Context influenced project design by imposing constraints in terms of time, space and budget Project design: All transport projects were characterised by efficient and effective designs Environmental projects (particularly 2 out of 5) were adversely affected by budget and time constraint, forecasting mistakes and social pressure, and they lacked the necessary flexibility Financial sustainability: Financial sustainability is completely ensured only for the Palermo water supply and Vigo waste water treatment projects Future financial sustainability is uncertain for seven of the projects assessed

  12. LESSONS LEARNT ON THE PERFORMANCE DRIVERS (2) Forecasting capacity:

  13. LESSONS LEARNT ON THE PERFORMANCE DRIVERS (3) Project governance: Governance is one fundamental factor accounting for project performance It should provide for a clear division of competence and adequate mechanisms to integrate the views of stakeholders Behavioural response: Appropriate behavioural response can palliate deficiencies in terms of design, governance or forecasting but it entails costs Role of the EC: The EC’s involvement in the project planning has been highly variable across countries and type of project

  14. THE INTERPLAY BETWEEN FACTORS Drivers are combined in different ways, through project-specific patterns Project design and governance are two legs upon which a project stands: they should both adhere to a precise and specific vision of what the project wants to achieve Timing of effects is more determined by the project’s structural features than by specific drivers

  15. LESSONS LEARNT ON EX-POST CBA (1) Ex-post CBA provided the framework of analysis to disentangle the most crucial aspects of the project’s performance and final outcomes This exercise allowed the team to raise different methodological issues and to draw lessons learnt of general interest, concerning the following themes: • Project identification • Time horizon • Counterfactual scenario • Demand analysis • Social Discount Rates • Quantification of costs and benefits • Shadow prices

  16. LESSONS LEARNT ON EX-POST CBA (2)

  17. LESSONS LEARNT ON EX-POST CBA (3)

  18. CONCLUSIONS The ingredients of success for public investment projects The origin of project ideas: entrepreneurialism within government Professionalism as a built-in insurance mechanism Social ownership to cope with civil claims Forecasting and monitoring as learning devices Governments and projects Incentives for success and identity

  19. RECOMMENDATIONS • Develop ‘intrapreneurial’ teams in public administration • Establish a close relationship between project identification and planning • Endorse a role of policy advisor • for the EC • Provide solid technical design and forecasting • Develop sound and reliable cost-benefit analyses • Cost-benefit analysis as key input of the selection • Promote an independent quality review • Make social acceptance part of the process • Design responsive governance • arrangements • Ensure financial sustainability • Design solid risk management schemes • Carry out ex-post evaluation • Reward good projects and teams • Promote knowledge transfer and sharing of best practice • Track project life: a project data warehouse • Undertake systematic monitoring • Allow restructuring and redesign

  20. Thank youvignetti@csilmilano.com

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